Economy

ACCC to target unconscionable conduct… IR fact sheet released… Tax office careful with SMEs… Predatory pricing bill will help SMEs?… Online recruitment unheaval… Home ownership dead?… Rates on hold

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ACCC signals new aggression on ‘unconscionable conduct’

The competition watchdog has let big businesses “slide” on unconscionable conduct because it was seen as too hard to prove, its chairman Graeme Samuel acknowledged yesterday.

In a startling admission, Samuel told the Council of Small Business Organisations of Australia Summit in Sydney that Australian Competition and Consumer Commission prosecutors have tended to use misleading and deceptive conduct provisions of the Trade Practices Act rather than taking the “more difficult route” of dealing with the unconscionable conduct elements of a case.

As a result, he says, the law on unconscionable conduct has not developed.

There are a growing number of small business people dissatisfied with the ACCC and its failure to take action against big business bullies, especially in the franchising community. Earlier this week we reported the fury in the Midas franchising community over the ACCC decision not to pursue a number of complaints from franchisees against the franchisor for unconscionable conduct.

Government ministers, including Small Business Minister Fran Bailey, are also coming in for criticism for not enabling the ACCC to protect small businesses and franchisees.

One disgruntled franchisee of another system writes: “The ACCC appears to be more interested in the big end of town stuff that builds reputations… If the ACCC continues to delude itself that this is not occurring, then one can only suggest it is a case of incompetence at the highest levels within Government.”

Samuel says the ACCC will now begin a concerted effort to take unconscionable cases forward. “We are changing our focus to take a much more aggressive attitude to pursuing unconscionable conduct, and this means pushing to get more matters before the courts,” Samuel says.

He argues, in defence of the regulator, that SMEs are not taking advantage of some of the market protections that are available to them, including the new laws allowing collective bargaining.

Major shopping centre tenants in particular could benefit from the provisions, he says. “I remain perplexed as to the unwillingness of centre tenants to engage in some form of collective bargaining with centre landlords – for surely this approach would offer a strengthened negotiating hand to tenants in their lease dealings.”

– Mike Preston

 

Mandatory IR fact sheet released

The Federal Government has this morning released the workplace relations fact sheet that most Australian employers will be legally required to give to their employees after 20 July.

Employers that operate under federal workplace relations laws will face fines of up to $110 per breach if they fail to give the fact sheet to all new employees within three months, and new employees with seven days, of the 20 July commencement date.

Workplace Ombudsman inspectors will make random visits to businesses to ensure employees have been given the one-page fact sheet.

– Mike Preston

 

Tax boss treads softly with SMEs

Australian Taxation Office Commissioner Michael D’Ascenzo distanced himself from recent tough declarations that the tax office was planning to use external debt collectors in his speech to the Council of Small Business of Australia Summit yesterday.

Recent National Auditor figures showed 600,000 small businesses with turnover of less than $2 million owed the tax office a total of $6.4 billion. The tax office announced it would spend $42 million on external debt collectors as part of a major campaign to collect tax debts owed by businesses and individuals.

But in his speech yesterday D’Ascenzo avoided mentioning the figures, instead focusing on the tax office’s $40 million Small Business Assistance Program. The program, flagged in this year’s federal budget, is designed to help new and existing businesses getting into tax trouble through training and education delivered through personal assistance visits, seminars, workshops and telephone support.

“Our approach is that prevention is better than cure. It’s about engaging with businesses as early as possible to help them stay on track and ensure that any problems, such as debt, do not escalate and become unmanageable,”D’Ascenzo says.

– Mike Preston

 

Fielding predatory pricing bill could help ACCC protect SMEs

ACCC chairman Graeme Samuel appeared to give tacit support to Family First Senator Stephen Fielding’s proposed new predatory pricing laws yesterday.

Fielding has proposed that the current requirement in the Trade Practices Act to prove that predatory pricing behaviour is conducted with the “purpose” of diminishing competition be eased by introducing an “effect” test. Lawyers have questioned the effectiveness of his proposals, but they are stronger than those that have been proposed by the Federal Government.

In his speech to the Council of Small Business Organisations of Australia yesterday, Samuel acknowledged that the ACCC often finds it very difficult to prosecute big businesses for abuses of market power like predatory pricing because its investigations do not yield sufficient evidence to provide the ACCC with “a reasonable chance of success”.

The reason? Samuel says: “Evidence of the ‘purpose’ of a large business can be difficult to find.”

There appears to be at least half a chance that Fielding’s bill, which was introduced into Parliament on 18 June, will receive the Government support it requires to stand any chance of becoming law.

Small Business Minister Fran Bailey told COSBOA Summit attendees that the Government was considering Fielding’s bill and that there were more changes to the Trade Practices Act “in the pipeline”.

– Mike Preston

 

Online recruitment upheaval

There has been upheaval in the online recruitment market as chief executives step aside and companies shut their doors.

First CareerSites, which launched with much fanfare several months ago, recently shut its doors. CareerSites was started by well-respected former Morgan & Banks executive Chris LeCoic, who was also the director of specialist recruiter HR Matters. LeCoic had funding from three angel investors and launched the specialist online jobs portal in April.

CareerSites was a portal to 19 specialist sites divided by industry, with two sites each for accountants, legal and IT jobs along with sales marketing and hospitality.

The sites were location specific and segmented by search criteria. At the time of launch LeCoic says companies may still use generalist sites like Seek or MyCareer and his sites would make a second option, as advertisers typically list positions on more than one website.

Now the site is down and callers to a 1300 number are advised that the site is not operating and to call another number, where there is no answer.

SmartCompany has also learnt that Guy Sigston, founder of recruitment company Lloyd Morgan, has also stepped aside from his role as chief executive at JobsJobsJobs.

He told SmartCompany in February this year that: “My idea was Seek had been a tremendous success… and I thought: Well I think I can do this better.”

He predicted that JobsJobsJobs’s market cap would be a third of the size of Seek’s $1.6 billion market cap within three years and would knock off MyCareer and CareerOne.

But yesterday he told SmartCompany that he stepped aside as chief executive in mid April and the company was being run by Jim Stuart, who was former chief financial officer at internet company easyjobs.co.uk.

Sigston says he remains the second largest shareholder and he has a few other business interests, but that he has barely answered a phone or read a newspaper since he left. “I have a nine month old baby and a new one due in seven weeks.” However he did admit that he was quite frustrated not working. “I am a gardener without a garden.”

Meanwhile JobsJobsJobs is in the middle of a marketing drive with large billboards appearing all over Melbourne.

Andrew Banks, director of Talent2, says there is a plethora of online recruitment sites and some will fail while others will grow. “We got approached to buy one recently and then it fell over,” he says.

But he says while Seek seems unassailable at present, competitors will grow stronger.

Meanwhile there are rumors that another online recruiter is close to the brink.

– Amanda Gome

 

The home ownership dream is dead

Treasurer Peter Costello loves pointing the finger at the states when discussing how unaffordable housing has become.

But the finger is now also being pointed at Treasury after a Treasury briefing obtained by a Freedom of Information request shows increasing land supply and cutting stamp duty does little to help home buyers.

The report obtained by Channel Seven says that the debt servicing burden for households was likely to increase. It points out that the stock of land in the most sought-after city locations is fixed and almost always appreciates in value with rising wealth.

In fact interest rates, the sharemarket, unemployment and household incomes are likely to have a greater influence on housing activity, it concludes.

 

Interest rates stay on hold

Interest rates have been kept on hold at 6.25%, in a widely expected decision announced by the Reserve Bank of Australia today.

All eyes will now be turned towards new CPI figures to be released on 25 July, with many analysts predicting that any evidence of inflationary pressure could prompt the RBA to lift rates when it meets in August.

– Mike Preston

 

Tax agent law rethink

Protests over controversial new rules for tax agents have paid off with the Government being forced to give the tax and accounting industry more time to consider the proposed changes.

The tax industry was told today that it now had until August 10 to provide the government with feedback on a proposed code of conduct and legislation which would establish a national tax agent’s board to replace state boards.

The proposed changes would also increase the qualifications required and protect taxpayers from penalties if they have an agent registered by the board.

– Amanda Gome

 

Economy round-up

The resources boom in Western Australian has triggered an estimated 20.5% increase in business investment and 7% GDP growth in the state over the past financial, the Western Australian Chamber of Commerce and Industry says.

The Australian Financial Review reports today that the CCIWA has been forced to dramatically increase its forecast of business investment in 2006-2007 from 3.5% to 20.% after a record $23 billion business investment was recorded in the state in the financial year to March.

Australia’s services sector continued to expand solidly in June, although there was a slight moderation from the previous month, according to the The Australian Industry Group – Commonwealth Bank Performance of Services Index released today.

Strong growth in the property & business services and finance & insurance sectors in June was offset slightly by softness in consumer related sectors caused by rising fuel costs, Australian Industry Group Heather Ridout says.

International Trade in Goods and Services data for May 2007 released by the Australian Bureau of Statistics today show Australia’s trade deficit narrowed significantly in May to $807million, a decrease of $109 million.

The deficit came in below the market expectation of $1200 million and was underpinned by a 3.0% increase in exports and a lower than expected increase in imports, ANZ economist Alex Joiner says.

At 12.50pm the ASX/S&P 200 is at 6298.4, the same as it was at the beginning of today’s trading. At the same time the Australian dollar is worth US85.65c, down slightly on last night’s US85.69c close.

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